Argentina vs. Chile

In 1816, the United Provinces of the Rio Plata declared their independence from Spain. After Bolivia, Paraguay, and Uruguay went their separate ways, the area that remained became Argentina. The country's population and culture were heavily shaped by immigrants from throughout Europe, with Italy and Spain providing the largest percentage of newcomers from 1860 to 1930. Up until about the mid-20th century, much of Argentina's history was dominated by periods of internal political unrest and conflict between civilian and military factions.

After World War II, an era of Peronist populism and direct and indirect military interference in subsequent governments was followed by a military junta that took power in 1976. Democracy returned in 1983 after a failed bid to seize the Falkland Islands (Islas Malvinas) by force, and has persisted despite numerous challenges, the most formidable of which was a severe economic crisis in 2001-02 that led to violent public protests and the successive resignations of several presidents. The years 2003-15 saw Peronist rule by Nestor and Cristina FERNANDEZ de KIRCHNER, whose policies isolated Argentina and caused economic stagnation. With the election of Mauricio MACRI in November 2015, Argentina began a period of reform and international reintegration.

San Miguel de Tucuman and Mendoza areas in the Andes subject to earthquakes; pamperos are violent windstorms that can strike the pampas and northeast; heavy flooding in some areas

volcanism: volcanic activity in the Andes Mountains along the Chilean border; Copahue (2,997 m) last erupted in 2000; other historically active volcanoes include Llullaillaco, Maipo, Planchon-Peteroa, San Jose, Tromen, Tupungatito, and Viedma

severe earthquakes; active volcanism; tsunamis

volcanism: significant volcanic activity due to more than three-dozen active volcanoes along the Andes Mountains; Lascar (5,592 m), which last erupted in 2007, is the most active volcano in the northern Chilean Andes; Llaima (3,125 m) in central Chile, which last erupted in 2009, is another of the country's most active; Chaiten's 2008 eruption forced major evacuations; other notable historically active volcanoes include Cerro Hudson, Calbuco, Copahue, Guallatiri, Llullaillaco, Nevados de Chillan, Puyehue, San Pedro, and Villarrica; see note 2 under "Geography - note"

note 1: the longest north-south trending country in the world, extending across 39 degrees of latitude; strategic location relative to sea lanes between the Atlantic and Pacific Oceans (Strait of Magellan, Beagle Channel, Drake Passage)

note 2: Chile is one of the countries along the Ring of Fire, a belt of active volcanoes and earthquake epicenters bordering the Pacific Ocean; up to 90% of the world's earthquakes and some 75% of the world's volcanoes occur within the Ring of Fire

note 3: the Atacama Desert - the driest desert in the world - spreads across the northern part of the country; Ojos del Salado (6,893 m) in the Atacama Desert is the highest active volcano in the world, Chile's tallest mountain, and the second highest in the Western Hemisphere and the Southern Hemisphere - its small crater lake (at 6,390 m) is the world's highest lake

Argentina's population continues to grow but at a slower rate because of its steadily declining birth rate. Argentina's fertility decline began earlier than in the rest of Latin America, occurring most rapidly between the early 20th century and the 1950s, and then becoming more gradual. Life expectancy has been improving, most notably among the young and the poor. While the population under age 15 is shrinking, the youth cohort - ages 15-24 - is the largest in Argentina's history and will continue to bolster the working-age population. If this large working-age population is well-educated and gainfully employed, Argentina is likely to experience an economic boost and possibly higher per capita savings and investment. Although literacy and primary school enrollment are nearly universal, grade repetition is problematic and secondary school completion is low. Both of these issues vary widely by region and socioeconomic group.

Argentina has been primarily a country of immigration for most of its history, welcoming European immigrants (often providing needed low-skilled labor) after its independence in the 19th century and attracting especially large numbers from Spain and Italy. More than 7 million European immigrants are estimated to have arrived in Argentina between 1880 and 1930, when it adopted a more restrictive immigration policy. European immigration also began to wane in the 1930s because of the global depression. The inflow rebounded temporarily following WWII and resumed its decline in the 1950s when Argentina's military dictators tightened immigration rules and European economies rebounded. Regional migration increased, however, supplying low-skilled workers escaping economic and political instability in their home countries. As of 2015, immigrants made up almost 5% of Argentina's population, the largest share in South America. Migration from neighboring countries accounted for approximately 80% of Argentina's immigrant population in 2015.

The first waves of highly skilled Argentine emigrant workers headed mainly to the United States and Spain in the 1960s and 1970s, driven by economic decline and repressive military dictatorships. The 2008 European economic crisis drove the return migration of some Argentinean and other Latin American nationals, as well as the immigration of Europeans to South America, where Argentina was a key recipient. In 2015, Argentina received the highest number of legal migrants in Latin America and the Caribbean. The majority of its migrant inflow came from Paraguay and Bolivia.

Chile is in the advanced stages of demographic transition and is becoming an aging society - with fertility below replacement level, low mortality rates, and life expectancy on par with developed countries. Nevertheless, with its dependency ratio nearing its low point, Chile could benefit from its favorable age structure. It will need to keep its large working-age population productively employed, while preparing to provide for the needs of its growing proportion of elderly people, especially as women - the traditional caregivers - increasingly enter the workforce. Over the last two decades, Chile has made great strides in reducing its poverty rate, which is now lower than most Latin American countries. However, its severe income inequality ranks as the worst among members of the Organization for Economic Cooperation and Development. Unequal access to quality education perpetuates this uneven income distribution.

Chile has historically been a country of emigration but has slowly become more attractive to immigrants since transitioning to democracy in 1990 and improving its economic stability (other regional destinations have concurrently experienced deteriorating economic and political conditions). Most of Chile's small but growing foreign-born population consists of transplants from other Latin American countries, especially Peru.

Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Although one of the world's wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight.

Cristina FERNANDEZ DE KIRCHNER succeeded her husband as president in late 2007, and in 2008 the rapid economic growth of previous years slowed sharply as government policies held back exports and the world economy fell into recession. In 2010 the economy rebounded strongly, but slowed in late 2011 even as the government continued to rely on expansionary fiscal and monetary policies, which kept inflation in the double digits.

In order to deal with these problems, the government expanded state intervention in the economy: it nationalized the oil company YPF from Spain's Repsol, expanded measures to restrict imports, and further tightened currency controls in an effort to bolster foreign reserves and stem capital flight. Between 2011 and 2013, Central Bank foreign reserves dropped $21.3 billion from a high of $52.7 billion. In July 2014, Argentina and China agreed on an $11 billion currency swap; the Argentine Central Bank has received the equivalent of $3.2 billion in Chinese yuan, which it counts as international reserves.

With the election of President Mauricio MACRI in November 2015, Argentina began a historic political and economic transformation, as his administration took steps to liberalize the Argentine economy, lifting capital controls, floating the peso, removing export controls on some commodities, cutting some energy subsidies, and reforming the country's official statistics. Argentina negotiated debt payments with holdout bond creditors, continued working with the IMF to shore up its finances, and returned to international capital markets in April 2016.

In 2017, Argentina's economy emerged from recession with GDP growth of nearly 3.0%. The government passed important pension, tax, and fiscal reforms. And after years of international isolation, Argentina took on several international leadership roles, including hosting the World Economic Forum on Latin America and the World Trade Organization Ministerial Conference, and is set to assume the presidency of the G-20 in 2018.

Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports of goods and services account for approximately one-third of GDP, with commodities making up some 60% of total exports. Copper is Chile's top export and provides 20% of government revenue.

From 2003 through 2013, real growth averaged almost 5% per year, despite a slight contraction in 2009 that resulted from the global financial crisis. Growth slowed to an estimated 1.4% in 2017. A continued drop in copper prices prompted Chile to experience its third consecutive year of slow growth.

Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, effective 1 January 2004. Chile has 26 trade agreements covering 60 countries including agreements with the EU, Mercosur, China, India, South Korea, and Mexico. In May 2010, Chile signed the OECD Convention, becoming the first South American country to join the OECD. In October 2015, Chile signed the Trans-Pacific Partnership trade agreement, which was finalized as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and signed at a ceremony in Chile in March 2018.

The Chilean Government has generally followed a countercyclical fiscal policy, under which it accumulates surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and generally allows deficit spending only during periods of low copper prices and growth. As of 31 October 2016, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $23.5 billion. Chile used these funds to finance fiscal stimulus packages during the 2009 economic downturn.

In 2014, then-President Michelle BACHELET introduced tax reforms aimed at delivering her campaign promise to fight inequality and to provide access to education and health care. The reforms are expected to generate additional tax revenues equal to 3% of Chile's GDP, mostly by increasing corporate tax rates to OECD averages.

Argentina continues to assert its claims to the UK-administered Falkland Islands (Islas Malvinas), South Georgia, and the South Sandwich Islands in its constitution, forcibly occupying the Falklands in 1982, but in 1995 agreed to no longer seek settlement by force; UK continues to reject Argentine requests for sovereignty talks; territorial claim in Antarctica partially overlaps UK and Chilean claims; uncontested dispute between Brazil and Uruguay over Braziliera/Brasiliera Island in the Quarai/Cuareim River leaves the tripoint with Argentina in question; in 2010, the ICJ ruled in favor of Uruguay's operation of two paper mills on the Uruguay River, which forms the border with Argentina; the two countries formed a joint pollution monitoring regime; the joint boundary commission, established by Chile and Argentina in 2001 has yet to map and demarcate the delimited boundary in the inhospitable Andean Southern Ice Field (Campo de Hielo Sur); contraband smuggling, human trafficking, and illegal narcotic trafficking are problems in the porous areas of the border with Bolivia

Chile and Peru rebuff Bolivia's reactivated claim to restore the Atacama corridor, ceded to Chile in 1884, but Chile has offered instead unrestricted but not sovereign maritime access through Chile to Bolivian natural gas; Chile rejects Peru's unilateral legislation to change its latitudinal maritime boundary with Chile to an equidistance line with a southwestern axis favoring Peru; in October 2007, Peru took its maritime complaint with Chile to the ICJ; territorial claim in Antarctica (Chilean Antarctic Territory) partially overlaps Argentine and British claims; the joint boundary commission, established by Chile and Argentina in 2001, has yet to map and demarcate the delimited boundary in the inhospitable Andean Southern Ice Field (Campo de Hielo Sur)